Consumer Market for Powerbik Powerbike in Thailand - Term Paper Example

The benefits of cycling: a marketing opportunity for Powerbike in Thailand Contents Introduction 3 Current Consumer Market for Powerbike 3 Positioning Strategy 6 Opportunity into Bangkok 9 Conclusion 12 Reference 13 Bibliography 14 Introduction There has been a growing concern for pollution caused by car users in Thailand. The rapid increase in the use of cars and two wheelers in Thailand are responsible for increased pollution in the city, subsequently causing the government of the place to address the alarming issue with haste. In fact, it has been particularly focusing on the use of two wheelers, such as bicycles and power bikes in the country, as they leave behind less carbon footprints as compared to the other four wheelers. Thus, there is substantial awareness among the masses to control and reduce the menace caused due to pollution, which has generated high demand for two wheelers like bicycles and power bikes in the region. The project seeks to bring forth the marketing opportunities for power bikes in Thailand. For this, it begins with providing a detailed description of the current consumer market for this business, which includes the demographics and psychographics of the place. This is followed by the designing a positioning strategy for power bikes, including an example of a piece of advertisement for the same. Finally, an analysis is made with regards to the prospects of the enterprise moving to service the business market in Bangkok. Current Consumer Market for Powerbike Thailand has a population of 65.1 million. 10 million of this population thrives in the capital city of the place, Bangkok. Although Thais make up for the majority of the population of the place, the region has historically demonstrated migratory crossroads. The Khmer, Mon, Malay, Lao, Indians and Chinese are some of the races which have contributed to the ethnic diversity of the place. Despite the same, the region demonstrates high social and cultural integrity. Chinese constitutes the largest ethnic group while some of the other groups include Indians, Malays, Vietnamese and Cambodians. According to recent estimates by the United Nations Population Information Network, the Thai population is expected to reach 74 million by the year 2050. This fact is particularly favorable for the Powerbike marketers because of the availability of a large population. Additionally, the fact that 68% of this population lives in the rural areas are a blessing for the Powerbike marketers as they are less likely to afford to own four wheelers and would rather prefer bicycles, and bikes as substitutes. In general, rural population have greater demand for vehicles such as bikes, bicycles etc (Panthong, 2012). Moreover the migration of the urban population to Bangkok has aggravated the problems of land shortage, congestion, and air and water pollution. This has particularly generated demand for two wheeler vehicles in the region. Despite the phase of fast social and economic transformation which has subsequently improved the quality of life of the place, there are ample evidence depicting an ever widening gap between the poor and the rich people. This has consequently generated greater income inequality among the masses. This has been complemented by the replacement of nuclear families in the region and weakening of the sense of community and conventional forms of communities and safety nets. This has particularly enhanced vulnerability of the disadvantaged groups in the region (Panthong, 2012). The pollution awareness, coupled with over population and congestion has been the primary reason for the intense competition in the motor cycle industry in Thailand. The beginning of the year 2012 has shown a dramatic start of the spread of the industry across the country. Some of the major manufacturers such as Yamaha and Honda have particularly announced their annual business plans with the inclusion of a number of new products. Honda, which has a market share of more than 50% of the motorcycle market in Thailand have launched 7 new models in the region, which is the highest number in any single event since the start of business of the company in the country. It also includes Honda’s global model which it seeks to import. On the other hand, Yamaha, which is the country’s second most largest manufacturer made announcement that it would launch 6 new models of bikes in the same year, This shows that there is a large market for two wheeler vehicles such as bicycles and bikes in the region, which is why the sales trends of bikes in the region has been on a dramatic rise (ICCT, 2011, p.2-4). It is forecasted that two wheeler sales in Thailand would rise by 11% in 2012. Suzuki Thailand has an expected sales volume to be at par with what it was three years back. This is because of its increasing popularity of new models among the young generation. The local distributor, Thai Suzuki Motor seeks to sell more 100,000 bikes this year arising out of increasing sales of the new models like Shogun, Smash and Hayate (Automotive Intelligence, 2010, p.9). Between the years, 2005 and 2006, the sales figure of this company had experienced a small dip. While the sales figure in 2005 was 196, 466, it was 151,128 in 2006. The annual sales had fallen by 100,000 units between the years 2007 and 2009. The lowest sales record was seen in the year 2009 arising out of the delayed response and adjustment of the company to the changing conditions and scenario. In order to pace up sales, the company made investments of €12.7 million for improving its direct injection production facility, improve and ramp up its production and generate new models at a fast rate. It also planned to increase its exports to other countries (Automotive Intelligence, 2010, p.9). After experiencing a drop in sales by 17.9% in April, it regained sales growth again in May by 11.3%. The total number of units sold by the company reached an amount of 149,677 units. This figure is seen to increase by more than 10.6% last year during same time of the month when 135,369 units were sold from the showrooms. Honda remained at the leading position and with 100,267 unit sale, which was a rise of 9% from the month of April an almost identical figure of 9.6% over the April last year. Yamaha remained at the third position and showed a rise of 17.1% over the month of April to as many as 40,826 units overall. This was followed by Suzuki with 5,412 numbers of units, which was a rise of 9.1% over the previous month and 14.3% after each year. An almost static position was maintained by Kawasaki’s, whose sales showed a rise of 1% from April to 1,768 units. This was a more substantial rise of 42.8% from previous years (Automotive Intelligence, 2010, p.9). Positioning Strategy Positioning Statement: “Power bike feel the power” A positioning strategy is a statement of how Powerbike should be viewed by the target market. The positioning strategy aims to define the personality of Powerbike and how its target market perceives the brand. It highly depends on the nature of the relationship between the customers and the company. Positioning usually starts with a product but is not what is done with the product but to the mind of the customers that is the product is positioned in the mind of the potential customers (Ries, 2003, p. 3). In addition as one of the aspect of the positioning strategy, ideas about how a company can communicate to its target market segment. This is the stage where advertising plays a vital role in communicating the message to its customers. Positioning strategy involves ideas and also sometimes themes which are to be communicated effectively if the marketing strategies are to be implemented properly (Sengupta, 2005, p.76). Therefore the positioning strategy for Power bike will be “Powerbike feels the power”. The reason behind choosing such a positioning statement is that Power bike is a one stop bicycle retailers and offers a wide range of specialty bikes targeted all types of rides and are these bicycles aims to suit the customer’s requirements who love cycling and wish to purchase a bicycle for transportation. It aims to create a feeling of power that one can have by riding on the Powerbike and the statement also gets synchronized with the brand name, Powerbike, to feel the power. Thus after selecting the positioning statement it becomes necessary for Powerbike to decide upon the positioning strategy. The positioning strategy should be sound and must include several elements which are essential for the positioning strategy. These strategies are normally based on commitments towards the resources of the organization in the process to produce value for its target market. Some of the essential elements that Powerbike needs to adopt towards its positioning strategy. Deliver on the Promise: In order to deliver an effective positioning strategy which would remain effective over the period of time, Powerbike should be committed to create a substantial value for its target customers. Powerbike is a one stop retail outlet for bicycle and all the accessories. It should be able to keep up the promise of delivering a wide range of cycles to all the different types of customers ranging from new starters to experts. As Ning claims that whether one is cycling competitively or just a starter, Powerbike provides a range of bike that suits the ridding as well as budget pattern. Also Ning claims that the customers in Powerbike can expect fast as well as friendly services. Therefore as stated by the founder of Powerbikes, the company should live up to its expectation and deliver the products and services as promised. The company should be ready to spend millions of dollars on its advertisements and through the advertisements it will be able to generate awareness and in future endure loyalty towards its brand. Maintain consistency: In addition to delivering the promise, Powerbike should maintain is consistency. It ensures that its bikes are powerful and are suitable for a wide range of customers and backs on quality over price. The strategy should be maintained and consistent over a period of time. The strategy might change for Powerbikes depending upon the place, target customers but it should be consistent and appealing to the customers. To break through a cluster and establish the meaning of the brand for what it stands for is one of the biggest challenge experienced by a marketer and thus consistent positing will make the challenge much easier and endure brand loyalty. Next is to make the product perceived in the eyes of the customers. In the world of consumers who are expected to forget as there are various advertisements shown to them it becomes increasingly necessary to make things different as well as smile so that a customer is able to perceive what the product can do (O’Guinn, et al. p.225). Thus the basic premise for Powerbikes would be to make its positioning strategy simple but at the same time distinctive from other competitors in the market. Since cycling has many benefits the theme that Powerbike can opt for is of benefit positioning. The retail outlet can showcase the benefit that one would derive from cycling. This benefit should be the first option to consider when formulating the positioning strategy. Consumer tends to purchase products which drive some kind of emotional, functional or else self expressive benefits. Thus Power bike can position its product through benefit positioning and portray the product as a kind of instruments which would keep one healthy and fit. Body Copy A seat as comfortable as the sofa-Powerbikes So says the Powerbikers. Go ahead and unleash the power of a cycle with more power more energy! Come and experience the comfort at Powerbikes and benefit your health with an exciting range of bikes with a guarantee for lifetime and full time service available only to make you comfort and enjoy the ride. Just remember to visit the store any day starting from 15 June, come visit and experience the Power. Opportunity into Bangkok Likelihood of Powerbike moving to the business market in Bangkok For any successful business expansion is the core to success. It is essential for companies to expand and explore the outer market and build a brand and attract more customers towards the product and brand and built upon a brand image which would result in more profits and more revenue. Powerbikes also aims to expand within its country and then expand into the international market. By expanding the business internationally, a firm gets the opportunity to bypass the limitation in the home market. Through internationalization organizations are able to exploit the strategic capabilities which in turn will help to broaden the size of the market (Johnson, 2008, p. 292). Powerbike is a retail outlet operating in Thailand and plans to expand its outlet in Bangkok, the capital of Thailand. Bangkok also known as the city of angels would be a good opportunity for Powerbikes to explore and expand its business. The advantage would be that since Powerbikes is based in Thailand the management is aware of the culture and taste and preference of the customers and Bangkok being a part of Thailand would not differ much. As a result Powerbikes will have an advantage over the market scenario. According to Nui and Ning Bangkok is the most suitable place for the business to expand and flourish. Some of the reasons and opportunity for Powerbikes to expand in Bangkok are as follows, Bangkok is the capital of Thailand and also one of the largest cities in Thailand. According to City Population (2010) the capital city has a population of about 6.3million people and the greater Bangkok area has a population of about 11.9 million people. With more population the target market for Powerbikes also increases in a positive manner and since the cost of the cycles are relatively low as compared to any other transportation most of the residents in Bangkok tends to become the target market or the audience for Powerbikes. The current scenario of Bangkok suffers from a problem of severe traffic jams all over the city causing undue problems for the travelers and as a result the residents stress over the amount of traffic in the city. The people of Bangkok seems to be bothered about the traffic problem and with the introduction of Powerbikes it will provide an opportunity for the residents to purchase one and ease the traffic and save the time that they used to spend over the traffic at any point of the time. Thus it can be said that there are a high chance that the residents of Bangkok would prefer bike riding as an alternative transportation. The Government of Thailand has been promoting the use of bike riding and promoted the Bangkok cycling tour which was started by the Tourism Authority of Thailand (TAT) (Tourism Authority of Thailand, 2010) and also with the policy of “No Child without a Bicycle” campaign (Rotary Down Under, 2007) where the main motive was to allow the children of Thai to have bicycles in order to ride for their schools instead of walking barefoot. This is a huge opportunity for Powerbikes to take up the cause and introduce Powerbikes for children in Thai. Also with the cycling tours becoming the famous and popular transportation over the past few years both for the residents and also for the visitors as they are able to discover and see places which are not accessible through cars and busses. Thus the trend of cycling has been at a steep and at this point of time it will be perfect for Powerbikes to expand its business in Bangkok and experience the trend and provide the customers what they desire and want along with quality services. The majority of the universities in Thailand are surrounded around the capital city and this provides an opportunity for the company to target the college goes as they would prefer using cycles to travel to the university and in a way create demand for its bicycle along the students and in Thailand as a whole. In addition the environment will also not affect din a positive way as bicycles do not provide any carbon emission and as the younger generation are more concerned about sustainability of the environment it would surely prove to be successful and create a market in Thailand for its bicycles. Powerbikes also aims to provide benefit along with comfort and the young generations are equally conscious about health and also the environment. As a result Powerbikes will suit the requirements of the target market and their likelihood of the business moving to service the business market in Bangkok would prove to be profitable and will be able to create brand image of strong as well as comfort I the minds of the target audience. Therefore it can be said that the expansion plans of Powerbikes in Bangkok, the capital city of Thailand provides an a huge opportunity for Powerbikes to create a market for its products as the people around the city and also the government are increasingly promoting the use of cycles in an around the city so to reduce the traffic rates and also create sustainable environment. With respect to sustainability, Powerbikes can also emphasis more on green bicycles attracting more customers and thus creating a brand image of comfort, power and sustainability. Conclusion The present market conditions in Thailand demonstrate ample opportunities and prospects for the success and expansion of Powerbikes. This is primarily on account of the growing awareness of pollution caused by four wheeler vehicles and the subsequent demand generated for the two wheelers such as bicycles and bikes. Also the huge population thriving in the rural regions would also account for a major proportion of demand for Powerbikes, where the four wheeler vehicles are comparatively less affordable than the urban regions. Besides, demand for Powerbikes is expected to massive for the young population aged between 20 and 40 years of age. Powerbikes aims to position itself in the minds of customers as a powerful and tough two-wheeler, meant for all types of rides. It primarily targets those who have passion for cycling and also those who regard bicycles as convenient and comfortable mode of transport meant for daily use for outdoor purposes. Bangkok, being the capital city of Thailand not only provides a large consumer base for the product. Besides having a high population, it also has huge many foreign travelers and visitors visiting the place. Additionally, the infrastructure provided by the place is also favorable for setting up or expansion of existing establishments. Reference Automotive Intelligence. (2010). Asia monthly two-wheeler report. [Pdf]. Available at: http://www.segmenty.com/samples/Asia%20Two-wheeler%20Report%20-%20June%202010.pdf. [Accessed on May 31, 2012]. City population, 2010. Thailand. [Online]. Available at: < http://www.citypopulation.de/> [Accessed 1 June 2012]. ICCT. (2011). Sustainable Management of Two and Three-Wheelers in Asia. [Pdf]. Available at: http://www.theicct.org/sites/default/files/publications/ICCT_Asia23wheelers_2011_1.pdf. [Accessed on May 31, 2012]. Johnson, G., 2008. Exploring Corporate Strategy: Text & Cases, 7/E. Pearson Education India. O’Guinn, T. et al., 2011. Advertising and Integrated Brand Promotion. Cengage Learning. Panthong, K. (2012). Big-bike market set to change gear. [Online]. Available at: http://www.nationmultimedia.com/business/Big-bike-market-set-to-change-gear-30175431.html. [Accessed on May 31, 2012]. Ries, A., 2003. Positioning: The Battle for Your Mind. Tata McGraw-Hill Education. Rotary down Under, 2007. ‘No child without a bicycle … Rotarian’s dream well on way’. [Pdf]. Available at: < http://www.rotarydownunder.com.au/magazine/articles/07mar/24.pdf> [Accessed 1 June 2012]. Sengupta, S., 2005. Brand Positioning: Strategies for Competitive Advantage. Tata McGraw-Hill Education. Tourism Authority of Thailand, 2010. ‘Tourism Thailand’. [Online]. Available at: < http://www.tourismthailand.org/campaign/en/> [Accessed 1 June 2012]. Bibliography Cravens, D. W., 2010. Strategic Marketing 8E. Tata McGraw-Hill Education. Graham, H., Marketing Strategy and Competitive Positioning. Pearson Education India. Read More